Guide / Toolkit
Check Fraud: A Guide to Avoiding Losses
What is check fraud? How can financial institutions avoid it?
23 pages
Check fraud schemes can take many forms. Checks may be:
- Altered as to the payee or by the amount;
- Counterfeited;
- Forged by signature or endorsement;
- Drawn on closed accounts.
Check fraud criminals may be financial institution insiders, independent operators, or organized gangs. The methods they use to check fraud include:
- Getting customer information from financial institution insiders;
- Stealing financial institution statements and checks;
- Working with dishonest employees of merchants who accept payments by check;
- Rifling through trash for information about financial institution relationships.
Preventive measures presented include:
- Internal controls to prevent check fraud by insiders;
- Education and training of tellers;
- New accounts training;
- Positive pay;
- Electronic check presentation.
[Author's abstract]
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